The New Jersey Sports Gambling Case: It’s About More Than You Think

On December 5th, the Supreme Court will hear the gay wedding cake case. But the day before, they will hear the case of Christie vs. NCAA. At first glance, this appears as a case unique to New Jersey’s attempts to legalize sports betting in the state’s casinos and racetracks. However, the principles that may be articulated in this case can have far-reaching effects on how states and the federal government relate to one another. As such, this is a case with potentially important ramifications on the principles of federalism and the meaning and effect of the often overlooked Tenth Amendment.

In 1992, Congress passed the Professional and Amateur Sports Protection Act (PASPA) which made it illegal to have any sports betting in any state unless it was already approved in a state. Those states included Nevada, of course, but also Delaware, Montana and Oregon at the time. New Jersey was given a one-year window of opportunity after the law went into effect to approve sports betting, but wrangling over other issues at the time closed that window.

In 2011, New Jersey voters overwhelmingly approved a change to the state constitution granting the legislature approval to remove restrictions against sports betting. They, in fact, did so. The four major sports leagues along with the NCAA went to court and got an injunction against the action. The state did not deny their action violated PASPA; instead they argued that PASPA violated the Tenth Amendment and was therefore unconstitutional. In effect, they argued that the federal government “commandeered” the state government into enforcing federal law.

Thus, it is the so-called commandeering principle which is called into question in this case and along with it the Tenth Amendment. The commandeering principle has no roots in the Constitution itself, but arose most recently from two cases in the 1990’s. In one, the Court ruled that a federal law which imposed on states the duty to deal with nuclear waste according to federal standards or else accept ownership of the waste was a serious intrusion on the legislative functions of states. The second case decided that the federal government cannot command state officials to conduct gun background checks which were mandated under the federal Brady law.

These are the two most recent cases cited, but there have been more dating back over a century where the Court has made it known that Congress cannot require states to perform or prohibit certain acts even when the federal government could perform or prohibit those acts in the first instance. That is, what may be illegal under federal law need not be so under state law, and certain acts and behavior that may be illegal under state law need not be so under federal law. This is the basis of federalism, or dual sovereignty.

When the Constitution was drafted, the writers expressly rejected a system where the states would be used as agents of the federal government. That was the unworkable regime under the Articles of Confederation and its failure is why it was rejected. They settled on a system of dual sovereignty in which the state and federal governments would govern independently with each being directly responsible to its citizens thus insuring liberty and a check on one another. This is the foundation of federalism.

Some view this as simply a preemption case, but that is somewhat misleading. In preemption cases, Congress gives states the option of adopting state-level regulation of something, or ceding that function to the federal government. It is exactly how the myriad number of federal environmental laws are written. In this case, however, PASPA regulates states as states AND it provides no option to cede the issue of sports betting regulation to the federal government other than the only option presented- no sports betting at all. It should also be mentioned that the law is discriminatory with respect to states in that it specifically carved out exceptions for four states and presented a time-constrained option to a fifth.

The Court has used the commandeering principle when two conditions are met: (1) commandeering would frustrate the Constitution’s system of federalism, and (2) commandeering would frustrate political accountability. If Congress wants to ban sports betting, it must do so itself as a matter of federal law. Or it must lawfully induce state governments to ban sports betting. PASPA does neither. The mere fact they provided exemptions for certain states indicates that an outright ban was never a consideration and would have had serious political outfall in Nevada.

While New Jersey is, admittedly, playing a semantics game- they argue that their actions are simply removing state prohibitions on sports betting, not necessarily approving it- the decision in this case can have effects far beyond sports betting in New Jersey. A decision in the state’s favor would not give New Jersey any competitive advantage in sports betting as every other state with any form of legalized gambling could then follow suit if they so desired. In effect, the debate would be at the state level where there would be greater political accountability.

The NCAA and others will argue that this is simply preemption. However, preemption is premised on the presence of an affirmative federal regime. Assuming it is, the Supremacy Clause then enters the conversation. There is no such affirmative federal regime present here since PASPA is not a general ban on sports betting in the country. If it is not preemption, then it likely is commandeering.

If the Court rules that the Congress has the power to co-opt state legislatures and prevent them from repealing their own laws, what is to stop them from doing so in other areas? They can, without offering any replacement federal regulatory scheme, prevent states from repealing or amending regulations dealing with pharmaceuticals, fireworks, credit cards or a host of any other goods or services states regulate.

This goes beyond sports betting in New Jersey. It has the potential to be a sleeper blockbuster case.